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ELRCPartially AllowedCause No. 497 of 2013· [2014] KEELRC 514 (KLR)

Tailors and Textiles Workers Union v Vajas Manufacturers Ltd [2014] KEELRC 514 (KLR)

Industrial Court of Kenya at Nairobi
24 April 2014
1,093 words in judgment
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The bottom line

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Kenya's Industrial Court rejected an employer's refusal to agree new CBA terms and itself awarded better redundancy, retirement, and termination benefits for workers.

What this practically means

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Executive summary

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The claimant union, recognised under a Recognition Agreement and CBA with the respondent garment and textiles factory, referred a dispute over three proposed CBA clauses (redundancy, retirement and termination) after negotiations on 19th February 2012 reached a deadlock and conciliation appointed by the Ministry of Labour failed. The union proposed redundancy severance of 25 days per year worked, a retirement age of 60 years for all employees, and a graduated termination benefit scale topping at 30 days per year, citing comparators such as Fine Spinners Limited and Ritz Enterprises. The respondent opposed, relying on Section 40 of the Employment Act (15 days), the pending conversion of NSSF into a pension scheme, and Section 35(5) on service pay, contending that retirement age is left to the parties. The matter was disposed of by written submissions. The court framed three issues: reasonableness of the refusal, entitlement to relief, and costs. It found the respondent's refusal 'mischievous and a poor practice of industrial relations' and awarded relief that partially matched the union's claims: 21 days per year for redundancy (not 25), retirement at 60 for all employees, and a reduced graduated termination scale topping at 26 days. Costs were awarded to the claimant against the respondent.

Key legal issues

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01

Reasonableness of the respondent's refusal of the proposed CBA clauses on redundancy, retirement and termination

Holding

The refusal was unreasonable, mischievous and poor industrial relations practice; the court determined the clauses itself.

Reasoning

The parties negotiated, reached a deadlock, and conciliation failed, leaving the court to resolve the stalemate. The court found the respondent's submissions evasive and not intended to resolve the labour relations stalemate, and concluded the refusal without any counter offer was unjustified.

p. 3
02

Redundancy severance pay

Holding

Employees declared redundant to be paid 21 days' pay per completed year of service.

Reasoning

The union sought 25 days (up from 18 days negotiated in 2010) citing inflation and cost of living; the respondent argued redundancy follows poor performance and that Section 40 Employment Act provides 15 days. The court fixed an intermediate figure of 21 days.

p. 3
03

Retirement age

Holding

Retirement age increased to 60 years for all employees.

Reasoning

The union proposed raising retirement from 50/45 to 60 years for both sexes, arguing 60 years is the public policy, mood and opinion. The respondent said the law left retirement age to the parties' discretion. The court adopted 60 years for all employees.

p. 3
04

Termination benefits

Holding

A graduated service pay scale awarded: 15/17/18/22/26 days per completed year of service by length-of-service band.

Reasoning

The respondent opposed increases on the ground that employees are NSSF members remitting to a fund converting into a pension scheme, and cited Section 35(5) of the Employment Act on service pay. The court nonetheless awarded a graded scale, slightly below the union's proposal.

p. 3

Legal principles established

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  • A party's unreasonable refusal of negotiated CBA clauses without a counter offer constitutes poor industrial relations practice which the court will resolve by determining the clauses itself
  • CBAs should ordinarily provide better terms than the statutory minimum

Court orders

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  1. 1.Employees declared redundant to be paid at 21 days per each completed year of service
  2. 2.The retirement age be increased to 60 years for all employees
  3. 3.Employees terminated be paid: 0-5 years - 15 days pay per completed year of service; 6-10 years - 17 days; 11-15 years - 18 days; 16-20 years - 22 days; 21 years and above - 26 days
  4. 4.The costs of the suit to be borne by the respondent

Authorities

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Legislation

  • Employment ActSection 40
  • Employment ActSection 35(5)
Jurisdiction invoked
Reference of a negotiated labour dispute to the court by the Ministry of Labour after failed conciliation under the Labour Laws of Kenya (Employment Act 2007)

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Tailors and Textiles Workers Union v Vajas Manufacturers Ltd [2014] KEELRC 514 (KLR)", Case Analysis (2014). Cause No. 497 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2014/514/eng@2014-04-24

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.